Estee Lauder’s Acquisition of Tom Ford Appears Prudent, As Estee Remains a Pure Play in Beauty

After months of speculation by the media, wide-moat Estee Lauder announced it would acquire the Tom Ford brand, valuing the business at $2.8 billion. We had been apprehensive of this rumored deal, having been concerned that it would extend Estee’s reach into the fashion arena, which is beyond its core competencies. But we are pleased that the structure of the deal permits Estee to remain a pure-play beauty company as Ermenegildo Zegna will hold a long-term license for all Tom Ford-branded apparel and accessories excluding eyewear, for which Marcolin will retain the exclusive license.